Fixed energy tariffs explained

What is an energy tariff?
What's a fixed energy tariff (Plus pros and cons)
What's a variable energy tariff (plus pros and cons)
What's the standard variable tariff?
Unlimited Energy vs. Capped energy
Fixed vs. Variable energy tariffs

Fixed-rate energy deals have made a huge comeback after a brief disappearance during the energy crisis. In April 2025 about 35% of UK customers had a fixed energy tariff, compared to only 15% in April 2024.

Most energy customers were moved onto their supplier's standard variable tariff (SVT) when prices reached unprecedented highs during the crisis. On the SVT, your energy prices change with Ofgem's energy price cap.

Here's all the essential information about fixed tariffs, the benefits, and how they compare to the SVT, so you can be clued up when it comes to picking your next energy tariff.

What is an energy tariff?

An energy tariff is the way an energy provider charges you for your gas and electricity. The two most common types of tariffs offer fixed or variable rates.

Which energy tariff you choose depends on:

How much peace of mind you want over the price you pay
How often you want to switch providers or tariffs

What is a fixed energy tariff?

With a fixed-rate tariff, the price you pay for your energy is set for a specific period, usually 12 months. This means that the unit rates (the price per kWh) and the standing charge (the daily fee) will stay the same for the length of your contract.

Fixed rates are a great way to budget because you know exactly what you'll pay for each unit of energy for the length of your contract. And as the market has become more stable, fixed rates are often cheaper than those on a SVT energy deal.

After disappearing during the energy crisis, fixed deals have returned as wholesale energy prices have become less volatile.

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Here's a quick summary:

Tom is on a fixed tariff for electricity. He pays 25p/kWh and a 50p per day standing charge. If the energy price cap drops, Tom's payment for energy won't change because his rates are locked in.

What are the benefits of a fixed energy tariff?

Budgeting is easier. The cost of your energy per unit stays the same and your bills are more predictable.
They can be cheaper. In a stable energy market, fixed tariffs are often cheaper than a supplier's default variable rate. E.g. Some deals in mid-2025 were over £100 cheaper per year than the price cap.
You're protected from price hikes. If there's another energy crisis and wholesale prices shoot up, yo
The cost per unit of your energy won't be affected by the price cap until your contract ends.

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What are the downsides of a fixed energy tariff?

You could miss out on savings. If the cost of energy falls and the price cap drops, your price will stay at your more expensive agreed rate until your contract ends.
Exit fees apply. If you want to leave your contract early, you'll probably have to pay an exit fee. Generally speaking, exit fees on fixed tariffs are about £50 per fuel for 12-month deals, and around ~£95–£100 per fuel for many two-year fixes.

They aren't always the cheapest option. During the peak of the energy crisis in 2022, customers on fixed-rate tariffs often paid more for their energy than those on variable tariffs, because many fixed deals were priced much higher than the price cap.

What is a variable energy tariff?

If you're on a standard variable tariff (SVT), your prices will go up and down with the energy price cap, which is based on the wholesale energy market. If wholesale prices decrease, you'll save money. But you'll pay more when they go up.

Standard variable tariffs are the default pricing plan for energy suppliers. If you were on a fixed-rate contract that came to an end, you'd usually be automatically rolled onto your supplier's SVT.

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Here's a quick summary of variable energy tariffs:

Nina is on a variable tariff. She pays the price cap rate of 25.73p/kWh for electricity and a 51.37p per day standing charge. If the energy price cap increases, Nina might pay 28p/kWh for electricity and a 55p per day standing charge. Nina's bill will be more expensive, even if she uses the same amount of electricity.

What are the benefits of a variable energy tariff?

No early exit fees. You can usually switch energy suppliers or plans without having to pay a penalty.
You benefit from falling prices. If energy prices fall, your bills get cheaper at the next energy price cap review. At the moment that’s every three months.
You're protected by the price cap. If wholesale energy prices soar, Ofgem's energy price cap limits how much your supplier can raise your prices.

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What are the downsides of a variable energy tariff?

They can be more expensive. When the energy market is stable, SVTs are often more expensive than the best fixed-rate tariffs.
Your bills can go up. If energy prices increase, so will your bills.
Budgeting can be difficult. Because your payments can go up and down every few months, it can be harder to plan your finances.

What's the standard variable tariff?

The energy price cap sets a limit on the amount energy suppliers can charge customers for their standard variable tariff. It was introduced in 2019 to protect people from paying too much for their energy.

The energy regulator, Ofgem, sets it every three months. Find out when Ofgem will announce the next energy price cap.

The energy price cap rates for a typical household are currently (July - September 2025):

Electricity: 25.73p per kWh, with a 51.37p daily standing charge.
Gas: 6.33p per kWh, with a 29.82p daily standing charge.

The annual bill for the ‘average’ household is about £1,720 a year at this rate. This is a figure used to make the price cap changes easier to visualise. Your actual bill depends on how much energy you use.

The price cap limits the maximum amount that energy suppliers can charge you for each unit of energy you use and the daily standing charge.

Why do energy prices affect which tariffs are available?

Before the energy crisis in late 2021, it was easy to choose an energy tariff to suit your budget and needs. Fixed-rate deals were usually cheaper than standard variable alternatives and were often used by suppliers to compete for new customers.

However, when wholesale energy costs rose dramatically, fixed-rate energy deals became unavailable as suppliers withdrew them from the market.

Slowly fixed tariffs returned. Initially they could be more expensive than the SVT, but now that the energy market is less volatile, fixed energy tariffs can often be the best deal.

What type of energy deals are there, and which kind is best for me?

There are tons of utility suppliers offering different tariffs, deals, and packages. Knowing which is best for you isn’t straightforward.

Let's break it down so you can understand what’s on offer, what you’re getting for your money, and what's a good deal for you.

Unlimited Energy deal vs capped energy deal

An Unlimited Energy tariff is what it sounds like: unlimited usage!

You pay the same price every month and can use all the gas and electricity you need.
If you've got a mobile contract with unlimited data, calls, and messages, you already know how this works. There's no surprise bill later because all your energy usage is covered in one monthly payment.
You can get a fixed or a variable tariff, depending on whether you want a fixed contract or the flexibility of a rolling contract.
An Unlimited Energy tariff and a fixed energy tariff in one can be the ultimate combination for peace of mind about your bills.

Get a fixed price Unlimited Energy quote

A capped energy package is the standard offering you'll get from any energy company.

Your monthly direct debit is calculated based on an estimate of the typical energy usage for a household of your size.
If your meter readings show you've used more power than your supplier estimated, you'll need to pay the extra at the end of your contract or see your monthly payments go up.
To go back to mobile contract comparisons, this is like a capped data contract. You get a cheaper monthly payment, but maybe only 1GB of data, which doesn't always last very long.
A cheaper initial price doesn't mean you're getting everything you need to use for the price.

👉 Get a fixed price Capped Energy deal quote

Fixed vs variable energy tariffs

When you choose a fixed, capped tariff from a traditional energy supplier, the unit rate (kWh) and standing charge you pay stays the same throughout your contract.
This doesn't mean the direct debit price you're quoted is all you'll ever pay.
If you use more energy than is covered by your direct debit, you can see an increase to your monthly bill, or a bill for the overuse at the end of your contract.

🧠 Fixed tariffs explained

A fixed tariff protects you from energy price changes and keeps things predictable.

This is particularly good news when energy costs change every three months.
The fixed rate means you aren’t impacted by energy price increases, or decreases, when Ofgem updates the energy price cap.
Fixed tariffs are also less flexible Exit fees usually apply if you end your contract before the agreed date.

🧠 Variable tariffs explained

A standard variable tariff means that your bills will change after the quarterly Ofgem energy price cap announcement. Even if you use the same amount of energy, your bill could go up or down.

You get more flexibility with a variable tariff because you can switch to another supplier or energy deal more easily, and you could take advantage of lower prices if the market falls.

Get a quote from One Utility Bill, and choose between a fixed or variable tariff

Check out One Utility Bill's fixed energy tariff:

Get a fixed tariff when you sign up for a One Utility Bill package.

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Click the "fixed" option when selecting your energy.

Your fixed energy price will be set for 12 months, and your gas and electricity prices won’t change for the duration of your plan.

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